Is trade dispute a major factor influencing the complementarity of Sino-US solar PV products trade?

Abstract

Purpose Through empirical analysis of Sino-US solar photovoltaic (PV) trade, this paper aims to evaluate the complementarity of Sino-US solar PV trade by adopting trade combination degree (TCD) index, export similarity index (SI) and trade complementarity index (TCI). It also explores the role of trade disputes over Sino-US solar PV trade between China and the USA and important factors affecting the complementarity of the trade. Design/methodology/approach Based on the comparative advantage theory, this paper selects the TCD, export SI and TCI to evaluate the complementarity of Sino-US solar PV trade comprehensively. Among them, TCD and SI can directly reflect the degree of cooperation and competition of Sino-US solar PV trade. Finally, the authors further analyze the decisive factors affecting the complementarity of Sino-US PV trade by entropy weight method and multiple linear regression analysis on the influencing factors of TCI. Findings The solar PV trade between China and the USA still has a close relationship, and there is solar PV trade cooperation and competition between the two countries. The factors affecting the complementarity of Sino-US solar PV trade are mainly exchange rate levels rather than trade disputes between China and the USA. The solar PV trade policies of China and the USA will have a great negative impact on the global supply chain of solar PV products. The major solar PV products in China and the USA have a clear division in the global supply chain and still have a strong trade complementarity. Originality/value This paper conducts an empirical analysis of the Sino-US solar PV trade rather than a policy discussion. This research has important practical significance for the healthy and sustainable development of solar PV trade for both countries. It can also provide references to the current trade disputes between China and the USA in a broader sense.